c. Assume the initial facts of the problem (rd = 6%, EBIT = $1.6 million, rsU =

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c. Assume the initial facts of the problem (rd = 6%, EBIT = $1.6 million, rsU = 11%), but now assume that a 40% federal-plus-state corporate tax rate exists. Use the MM formulas to find the new market values for IA with zero debt and with $6 million of debt.

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Financial Management Theory And Practice

ISBN: 9781439078105

13th Edition

Authors: Eugene F. Brigham, Michael C. Ehrhardt

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